FTC Emphasizes Competitive Issues Arising From Partial Interest Acquisitions

On May 9, the Federal Trade Commission (FTC) posted an article summarizing recent developments and areas of competitive sensitivity in the acquisition of partial equity interests.  Most antitrust challenges to mergers or acquisitions involve situations in which an acquiror takes control of the target company.  However, substantive antitrust issues also can arise from acquisitions of less than controlling interests.  The FTC has previously sought substantial remedies in acquisitions of minority interests in a competitor.  These remedies have included imposing firewalls, altering companies' ownership interests to become passive investors, or seeking divestitures.

The FTC's post, which can be found here, outlines three ways in which partial-interest acquisitions in a competitor could lessen competition.  First, an entity could use its interest—through representatives on a competitor's board, for example—to affect decisions of the target.  Second, an acquiring company's